Cambodia Will Be Asia's Next Online Shopping Battleground

For most residents of Cambodia, the postal system has a bad reputation. It can take weeks for an item to arrive from abroad, and without a computerized system, recipients often have to look up their package by country of origin in handwritten notebooks. Sometimes their arrival is accompanied by surprise customs fees, and sometimes it doesn’t arrive at all.

Express delivery workers pack parcels for their customers outside an office building during the "Singles' Day" online shopping festival, in Beijing, China, Wednesday, Nov. 11, 2015. Cambodia will be one country to miss out this year. (AP Photo/Andy Wong)

“A few years ago, I showed up at the post office and saw that a package that had arrived for me had already been signed for. It turns out that the post man had decided to take it home with him. I eventually got it back, but it had been clearly been opened and rifled through,” says Lina Goldberg, whose blog MoveToCambodia provides helpful advice to current and future Cambodian residents.

While Goldberg says the postal system “has been improving by leaps and bounds over the last two years," shipping things to and from Cambodia is still a challenge. But while it might be annoying for individuals, nationwide it remains a major barrier to online shopping, says market research firm Kantar TNS.

Although 32.5% of the Cambodia uses the internet, only 8% of Cambodians use the internet to shop – on par with Ghana, Egypt, and Myanmar (whose internet is significantly worse), according to Kantar TNS's Connected Life report. It means Cambodians also miss out on many deals like "Singles' Day," November 11, a shopping “holiday” started by Chinese e-commerce giant Alibaba that is now the biggest shopping day in the world.

Alibaba subsidiary AliExpress has expanded into Cambodia, as has Amazon, ASOS, and Marks & Spencer, but while they may be popular with foreigners, the brands still have a lot of work to make inroads with Cambodian shoppers.

The younger generation, at least, seems keen to catch up with their Asian peers as consumers. Sok Sopheakpanh, a third year student at the Royal University of Phnom Penh, says she loves shopping online with her MasterCard because quality products are hard to find in Cambodia.

“I buy almost every kind of product [online], especially cosmetics because I don’t trust cosmetics in Cambodia, and price is the same,” she says, adding, “However, there are some problems like my ordered products did not come but I got my money back.”

Sopheakpanh says, however, that most Cambodians are not like her: “Cambodians still lack online shopping literacy and that is why most them do not do online shopping. They think online shopping is not trustworthy.”

Fake goods continue to be a major problem in Cambodia, according to Kantar TNS's Seng Lytor, and while online shopping could provide a replacement, consumers have yet to develop trust. “Cambodian consumers do not have a lot of faith in quality of products sold on the internet (or anywhere). There’s a lot of fake goods around in Cambodia. We believe that a product guarantee, or even a simple exchange service, could increase e-commerce as well,” says Lytor.

Kantar TNS expects that international sites like AliExpress and Amazon will come to dominate e-commerce in Cambodia – especially with their consumer protection policies. But that may be at least five years away, and for now the domestic market is adopting to local conditions – like the fact that most Cambodians still do not use credit or debit cards.

Many local shopping sites have seen success as a hybrid online/brick and mortar business, says Goldberg, with items sent through local couriers. Many sites like BookMeBus.com allow for payments to be transferred over mobile payment systems in addition to credit cards.

“Local payment systems like WING and SmartLuy have allowed local businesses to expand their domestic reach. For example, I buy dog food from Edgar Allen Paw in Phnom Penh and they courier it to me in Siem Reap using Cambodia Express,” says Goldberg.

“So although e-commerce in Cambodia is in its infancy, businesses have adapted to the local market to find ways to allow customers to shop online. As more and more banks are offering VISA debit cards, the market will only continue to expand.”